The deal between Greece and the Eurozone may have been signed last week, but without the official okay of the Germany parliament, no monies would be forthcoming.
Chancellor Angela Merkel urged lawmakers to back negotiations Friday pointing to financial chaos in Greece and throughout the world if the bailout plan failed to be put in place.
With what seemed like little choice, the majority of the parliamentary officials came through and agreed to begin talks on the third bailout program to the tune of 86-billion-euro ($94 billion). 439 members of parliament voted in favor of negotiations on Friday, while 119 voted against.
Christoph Schmidt, an economist and advisor to Merkel said of the vote, "The Bundestag will send that signal most likely today and then we have to take it step by step."
Not all members of the Eurozone are in favor of the new bailout plan and even in Germany, the country that is most in debt to Greece, many lawmakers disagree with the next round of funding.
German Finance Minister Wolfgang Scheauble, for example, points to Greece’s past averseness to any austerity measures and continues to believe that a temporary exit from the euro zone – or Grexit – would have been a better course of action.
Debt Reduction Key
Some Eurozone members remain skeptical of addition loans to Athens and call for a debt reduction of some sort as an alternative move.
According to Christine Lagarde, managing director of the International Monetary Fund (IMF), debt relief may be the key to making the Greek agreement sustainable, adding that a “significant extension of Greek debt maturities and reimbursement deadlines could be enough.”
Bob Parker, senior advisor at Credit Suisse, agreed saying, “…..over the long-term, there will be have to be haircuts and debt reductions for Greece."
